Do I need a tax id number to sell online in 2021?

Written by Hasham Usman

November 13, 2021

We have received this query many times that we will need a tax id number to sell online?

So in this article, we will find out what is really Tax ID Number required to do business online.

People think that Tax ID Number and EIN are the same things, but this is not true.

Tax ID Number consists of unique nine-digit numbers used by the IRS to identify individuals or organizations. The tax id number is also known as a resale certificate or sales tax permit. Employer Identification Number (EIN) is similar to Social Security Number (SSN) obtained by businesses registered with the IRS for tax purposes.

need a tax id number to sell online

Determining If You Need a Tax ID Number

If you are selling products online, you may need a Tax ID Number (resale certificate or sales tax permit) because If you want to sell products online, You may be required to charge your customer’s sales tax and pay sales tax on the goods you sell. Even if you are selling services, the same will be applied.

Determining If You Need EIN

Let’s come to the Employer Identification Number (EIN) that is used to identify a business. The EIN is required for some business entities such as a corporation, partnership, and some LLCs. 

If you are running a business as a Sole proprietorship or have an LLC, but your business has no managers or employees, you should use your personal Social Security Number in place of EIN. But if you have an LLC and you have employees, then you will require EIN. 

The Bottom-line

In this comprehensive guide, I am telling you about the Need of Tax ID Number or EIN to do online business, the Difference between Tax ID Number and EIN, and the use of Tax ID Number and EIN. I hope this guide will find beneficial for you😊

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